Why is counter trade increasing?
There are a variety of reasons purchasers impose countertrade obligations on the seller.
1. The most important being a shortage of hard currencies. This is the most prevalent.
2. When a country produces a product in large quantities in which there is a low market demand, the country may offer products in counterpurchases as a means of getting rid of excess supply. Generally speaking, goods are offered for countertrade when there is a low or minimal market for the goods.
3. Another reason is because the country does not have an established international market in which to dispose of the goods. There may be a world market for the goods but the country does not have the ability or access to the market and thus may force products in countertrade.
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Pricing for International Markets
- What is demand elasticity?
- What factors influence international pricing?
- Which out of the four types of countertrade is the most beneficial to the seller?
- Why do governments scrutinize transfer pricing arrangements so carefully?
- What are the alternative objectives in setting transfer prices?
- In what various ways does the government set prices? Why do they engage in such activities?
- Why has dumping become such an issue in recent years?
- How can a marketer adjust prices to accommodate exchange-rate fluctuations?
- Do value-added taxes discriminate against imported goods?
- Why are companies generally not "allowed" to perform price fixing, but governments are?
- How can the problem of price escalation be counteracted?
- What is transfer pricing?
- What is dumping?
- What is price escalation?
- What is skimming?
- What is parallel imports?
- What are the causes of price escalation? Do they differ for exports and goods produced and sold in a foreign country?
- Why is it so difficult to control consumer prices when selling overseas?
- What are the causes and solutions for parallel imports and their effect on price?